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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 9, 1999
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LOEWS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-6541 13-2646102
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(State or other jurisdiction (Commission (I.R.S. employer
of incorporation or organization) file number) identification no.)
667 Madison Avenue, New York, N.Y. 10021-8087
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (212) 521-2000
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On June 9, 1999, CNA Financial Corporation, an 85% owned subsidiary of Loews
Corporation, issued the press release attached hereto as Exhibit 99 and
incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LOEWS CORPORATION
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(Registrant)
Dated: June 10, 1999 By: /s/ Barry Hirsch
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Barry Hirsch
Senior Vice President
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Exhibit 99
CNA Media:
CNA Plaza Clark Walter
Chicago, IL 60685 312-822-1454
Analysts:
Deborah Kamp
312-822-7752
CNA
For All the Commitments You Make
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NEWS
For Immediate Release
CNA to Sell Personal Lines Business to Allstate
Chicago, IL June, 9, 1999 - CNA, a leading insurance group, today announced it
is selling its personal lines business to Allstate. Allstate will set up a new
entity, to be called CNA Personal Insurance, to manage the business as a
separate independent agent company. The new $1.7 billion company will continue
to sell CNA personal lines products through the 3,800 independent agents
licensed to sell CNA products. CNA will have an ongoing interest in the new
company through a $75 million 10-year equity-linked note. CNA will have a
special advisor to the board of CNA Personal Insurance and will receive a
royalty fee for six years.
CNA Insurance Chairman and Chief Executive Officer Bernard L. Hengesbaugh said,
"This transaction offers a winning combination for our stockholders, our agents
and their customers, and our employees.
"For our investors, we've been clear that our strategy is to sharpen our focus
in those businesses where we are now or where we can become a market leader. As
a result of this transaction, we can redeploy and refocus the company's capital
to help maximize CNA's rates of return.
"For our agents and their customers, CNA Personal Insurance will be able to
provide an expanded product line with more competitive price and service
features than would be possible by CNA alone. And for our employees, this new
business offers an opportunity to be associated with a personal lines market
leader."
Hengesbaugh emphasized that the new organization will create maximum financial
value to the extent that it benefits agents and their customers. "CNA is
committed to working closely with the management of CNA Personal Insurance to
assure a smooth transition," he said.
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"We are pleased that all 2,000 of our Personal Insurance employees will
transfer to the new business," he said. "That means our agents will continue to
work with the people they have come to know and trust."
The CNA personal lines management team will stay largely in place. Ernest A.
Lausier, currently president of CNA's personal lines business, will continue in
a leadership role along with Doug Reynolds, currently assistant vice president
of Deerbrook Insurance, an Allstate subsidiary.
Edward M. Liddy, Allstate's chairman, president and chief executive officer,
said in a news release issued today by Allstate, "The total personal lines
insurance market is over $130 billion, and we already have $20 billion in
annual premium revenue. In today's market place we have to listen to the
customer, and provide our product where and how the customer wants it. We are
going to grow the number of channels we use to meet the needs of our customers,
and we intend to be the market leader in every channel in which we compete."
Under the terms of the agreement, Allstate will acquire the operations of CNA's
personal lines business including the reserves and the renewal rights to new
business. CNA will receive from Allstate cash of approximately $140 million at
the time of closing as well as a royalty fee tied to new and renewal premiums
written through the newly-created distribution channel. The personal lines'
surplus will remain with CNA. CNA has estimated the transaction value at
approximately 1.2x - 1.3x of personal lines' allocated book value.
"We have an important stake in the success of this transaction and we will do
everything in our power to ensure that it succeeds," said Hengesbaugh.
The transaction is expected to close by the fourth quarter. CNA believes there
will be no material effect on its operating earnings in 1999 and 2000 as a
result of this transaction.
CNA Financial Corporation (NYSE: CNA) and its subsidiaries (CNA) had 1998
revenues of $17.1 billion. CNA ranks among the top 10 U.S. insurance groups and
serves individuals and businesses with a broad range of insurance products and
insurance-related services. CNA products and services are marketed through
multiple distribution channels, including independent agents, brokers, general
agents and direct sales.
Since 1897, CNA has built on a foundation of financial strength, stability and
commitment to customers and business partners. Visit CNA at www.cna.com on the
World Wide Web. CNA is a registered service mark, trade name and domain name of
CNA Financial Corporation.
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FORWARD LOOKING STATEMENT
The statements contained in this press release, which are not historical facts,
are forward-looking statements. When included in this press release, the words
"believe," "expects," "intends," "anticipates," "estimates," and analogous
expressions are intended to identify forward-looking statements. Such
statements inherently are subject to a variety of risks and uncertainties that
could cause actual results to differ materially from those projected. Such
risks and uncertainties include, among others, the impact of competitive
products, policies and pricing; product and policy demand and market responses;
development of claims and the effect on loss reserves; the performance of
reinsurance companies under reinsurance contracts with CNA, general economic
and business conditions; changes in financial markets (interest rate, credit,
currency, commodities and stocks); changes in foreign, political, social and
economic conditions; regulatory initiatives and compliance with governmental
regulations; judicial decisions and rulings; the effect on CNA with regards to
third party corrective actions on Year 2000 compliance; changes in rating
agency policies and practices; the results of financing efforts; changes in
CNA's composition of operating segments; the actual closing of contemplated
transactions and agreements and various other matters and risks (many of which
are beyond CNA's control) detailed in CNA's Securities and Exchange Commission
filings. These forward-looking statements speak only as of the date of this
press release. CNA expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statement contained
herein to reflect any change in CNA's expectations with regard thereto or any
change in events, conditions or circumstances on which any statement is based.
NOTE: A conference call for the investment community will be held from 10 a.m.
to 10:45 a.m. CDT today. On the conference call will be Bernard L. Hengesbaugh,
chairman and chief executive officer of CNA. Participants can access the call
by dialing 800-390-9847. The call is available to the media, but questions will
be restricted to the investment community. A taped replay of the call will be
available, beginning one hour after the call ends, until 5 p.m. EST on June 16,
1999, by dialing 800-395-2178.
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